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Friday, 24 December 2010

Artist Resale Royalty, Harmonisation and a Comment from Down Under

Following Monday's post ("Artist's Royalty Right: not as much impact as was hoped/feared"), The 1709 Blog has received the following thoughts and observations from a pair of Australians Dr Anne Sanders (an art historian) and John R Walker (an artist), who write:

"We have been following developments with regard to the derogation concerning the resale royalty legislation in the UK. Australia has recently enacted an artist resale royalty legislation that differs in major ways from the scheme created by DACS in the UK. The scheme adopted in Australia is nothing like the scheme that was lobbied for by DACS’ sister organisation, Viscopy (Australia). The tender for the implementation of the Australian scheme was not awarded to Viscopy (the CEO of Viscopy is Joanna Cave, ex CEO of DACS). The sole official Australian agency appointed by the government for the implementation and collection of the resale royalty is the Copyright Agency Limited (CAL).

The Australian resale royalty scheme is not in any way a precedent for the adoption of a fully retrospective, compulsory scheme, as envisaged by DACS. The resale royalty differs so much from one country to another as to beg the question: harmonising with what? The UK is being forced to harmonise with a phantom construct. The EU directives are very vague on important detail and the Berne Convention expressly forbids formalities such as compulsory, collective management (rhe Berne Convention Article 5(2) expressly forbids any member country imposing registration on a rights holder as a condition of protecting his copyright. The enjoyment and the exercise of these rights shall not be subject to any formality). Any claim that there is a single, uniform model of artists resale royalty is extremely dishonest.

The scheme, as it exists in the UK, is already a violation of the fundamental concepts that it claims to honour. The current push to further extend it in the UK continues the violation of both copyright as an individual right of control of usage and of the Berne Convention’s requirement that there be no imposed formalities. The imposition of retrospectivity, under Australia’s constitution, raised fatal difficulties under two sections of the constitution; one of which deals with unjust enrichment and the other with what are effectively privatised, tax collections (such as hypothecated taxes).

The Australian Act is not retrospective; it does not apply to the first resale of artworks that were purchased prior to the introduction of the scheme (9 June 2010). The scheme is not compulsory for artists. There is a case-by-case freedom (Clauses 22 & 23) to refuse consent to collection and if an artist wishes to, they can make their own arrangements regarding collection. Neither usage of the right nor collective management is compulsory. The foundational ethos of Australia’s polity is democratic, community-minded, pragmatic and liberal. In Australia, retrospective violation of individual property rights and compulsory collective management need much stronger justification than payments of benefits to those artists most favoured by the market.

Speaking as a successful mid-career artist, retrospectivity, for me, is morally wrong. I have no right to and certainly don’t deserve a royalty on resales of the hundreds of artworks I have sold at good prices to buyers years ago; buyers who were innocent of the knowledge of a future royalty. These buyers gave me bread and wine for my journey. I am grateful for the help and support they gave me. If I had been forced to collect the royalty then I would, as a matter of conscience, have returned all of the money including the collection fee to the person it had been stolen from.

Resale Royalties are of doubtful net value to artists. In 2004, Viscopy commissioned Australia’s highly respected economic modelling agency, Access Economics, to model the likely impact of the fully retrospective, and very draconian scheme, that Viscopy was lobbying for. In this report, Access Economics warned that the claim of net benefit to artists was: “based upon extremely unrealistic assumptions, in particular the assumption that seller and buyer behaviour would be completely unaffected by the introduction of RRR [ARR]” and that, “Access Economics considers that the results of this analysis are both unhelpful and potentially misleading” (see Access Economics' report). Viscopy suppressed this report.

The harm caused by such schemes is in the form of what doesn’t happen, and therefore the harm is easily overlooked and underestimated. When an artist, such as myself, sells a painting for $10,000, I pay $4,000 to the costs of sales and marketing (through my representative agent) and retain $6,000 as income. In the case of $10,000 resale, I would receive $500 (according to the Australian scheme with its flat 5% rate). If buyer nervousness about the resale royalty, was to cause me to lose just one $10,000 first sale (on the primary market), I would need the royalty owed on $120,000 of future resales to recoup the lost income of that one primary market sale. These are very unattractive odds.

The only clear beneficiary of the DACS model of the resale royalty scheme is the management of this piece of transaction fee velocity. The correct term for schemes such as this, and their advocates, is ‘rent-seeking’. The largest single payment will always be to the costs of running the scheme. In the current financial situation, the last thing needed is the imposition of further transaction costs on any market.

The compulsory scheme advocated by DACS and Viscopy is a monopoly restriction of the terms of trade of artists. It is anti-market, anti-competitive and economically illiterate. It imposes significant opportunity costs upon artists as well as significant and unnecessary transaction costs upon the market in which artists make their living. For many artists, maximising first sale prices is a much better bet than gambling on payments when you are old or dead.

The only argument for extending the scheme to long-dead artists is to further increase payments to management. The proposed extension of the UK scheme is rent-seeking par excellence. The principles of a free, civil society are far more important than the secondary, instrumentalist goals of efficiency and convenience for managements.

We should not forgot to mention that the Australian legislation for an artists' resale right is sui generis; it was thought to be too tax-like to be incorporated as an amendment to the Commonwealth Copyright Act, hence recognising the profoundly different definitions and intentions of 'royalty' and 'tax', a point that has escaped the proponents of compulsory, collective management. It is significant again in that it does not conform to the harmonisation argument and being sui generis, does not compromise or set a precedent within the Copyright Act that encourages a diminuition of individual right of control".

This blog welcomes comments from Australia, from Europe and indeed from elsewhere on these observations.

24 comments:

Bruce Arnold
said...

From an Australian perspective your recent post by Sanders and Walker shows that some people are passionate about the droit, evident in language such as “stolen”, “morally wrong”, “very draconian” and “economically illiterate”. Advocacy statements regarding resale royalties are replete with assertions that the droit will be a disaster for artists and (more loudly) for dealers or that they will almost miraculously benefit the disadvantaged. The reality is more subtle. The empirical data presented by droit fans and critics indicates that the droit will not destroy the art market. It will not comprehensively remove the poverty of artists of their heirs. It will benefit leading artists and their estates; that is arguably an acceptable cost if others benefit. If successful mid/late career artists such as Sanders and Walker do not wish to enjoy royalties under the scheme they are of course free to distribute that income to those who are more needy.

A “foundational ethos of Australia’s polity”, to adopt the characterization used by Sanders and Walker, is the ‘fair go’, the notion that achievement and effort should be recognised and that disadvantage should be alleviated. A sad fact of the art industry in Australia is that some Indigenous artists were – and continue to be – disadvantaged under the free market that appears to be equated with virtue and economic literacy. Some were literally “given wine” (with studies suggesting that the wine was often cheap, nasty and – pace Sanders and Williams – unaccompanied by “bread’ of the banknote or sandwich variety) as the price for their work. They have missed out when the work has been recurrently resold for ten thousand times the original price. The Australian scheme is one effort to redress that inequity and to ensure that collectors share the rewards of those artists’ creativity. The scheme will inevitably be less than perfect. It is new. Let’s see how it turns out – and whether it can be improved – rather than condemn it out of hand as a “violation”.

Briefly, Sanders and Walker misunderstand the UK's Artist's Resale Right. The UK regulations have introduced compulsory collective managment, but have allowed for more than one collecting society to operate, with three collecting societies currently administering this Right. Compulsory collective management is the most efficient way of operating the resale royalty in the UK as the Right is inalienable - which means an artist can not be forced (or choose) to waive the Right. This recognises the weak bargaining position artists often find themselves in.

The reference to the Berne Convention is irrelevant. The section referred to says there should be no registration formalities to enjoying copyright protection - compulsory collective management has nothing to do with this. Artists can enjoy the Right, regardless of whether they have registered with a collecting society

The extension of the Artist's Resale Right in the UK is long overdue, and will harmonise the Right in the UK with the rest of the EU, where artists' families and beneficiaries have benefited from these post mortem rights for a long time.

The Right has been implemented very successfully in the UK - artists have benefitted from millions of pounds, and despite what our critics might think, DACS, as a not for profit organisation, has only charged artists 15%, which is what it costs us to operate the service, far less than the 40% Mr Walker pays his gallery.

I'd be happy to respond in more detail to any other queries - failing that, reports into the impact of the Artist's Resale Right can be downloaded from www.dacs.org.uk

The full description of the rights of copyright is “an individual right of control of usage”. Remove the right to say ‘no’ and one is reduced to a mere right of remuneration; a radically different concept to the full individual right of copyright. The UK resale scheme is in fact a radical overturning of common law understanding of copyright as an individual economic right. Thus the UK remains the only common law country to enact a scheme that is compulsory for the individual right holder, and retrospective in application. In Australia, for constitutional and legislative reasons, the UK scheme was simply not possible.

Under the Australian artist resale act, it is the individual right of choice, the right to say 'no', that is inalienable. Rights are a matter of freedom; a right to which you cannot say 'no' is a duty (tax) - not a right. Further, because copyright is purely an individual opt-in right, the Australian scheme (which offers an opt-out provision) was considered too tax-like to be part of the Commonwealth’s Copyright Act; hence is a sui generis act. It therefore offers no precedent for modification of the copyright act.

In the UK, it is the collection fees paid to the compulsory management collectives that is an inalienable right. DACS' Australian sister organisations went so far as to openly advocate to a parliamentary committee, that artists who wanted nothing to do with their compulsory scheme, should be forced to pay a fee to them for non-service.

The Australian legislation offers artists three options: artists may choose not to collect the royalty at all; they may use the Government-appointed sole service provider - Copyright Agency Limited (CAL), or artist may make their own individual collection arrangements. The legislation allows artists free individual right of choice, according to their individual circumstances.

I remain surprised that the UK's Conservative-Liberal Democrat government is supportive of compulsory collectivization. And also supportive of the restriction of the trading rights of individual artists in order to benefit a tiny minority of successful artists and artists' estates. What is the wider community benefit that justifies the use of government-mandated power to impose this scheme upon artists and art buyers? It is hardly a matter of national urgency, and it involves significant transaction and opportunity costs to artists.

Finally Ms Spriggens, regarding your reference to "my gallery" and costs. In Australia, there is a free market for the provision of commercial professional services. The collection of copyright fees is a professional service and not an opportunity to impose an ideological preference for a business model that favours collectives. Many artists are sole traders, for whom the economic interests of compulsory collectives are antithetical to their own economic interests. I freely choose to employ my representative gallery's services and like any other Australian, I am free to dispense with their services at any time.

The full description of the rights of copyright is “an individual right of control of usage”. Remove the right to say ‘no’ and one is reduced to a mere right of remuneration; a radically different concept to the full individual right of copyright. The UK resale scheme is in fact a radical overturning of common law understanding of copyright as an individual economic right. Thus the UK remains the only common law country to enact a scheme that is compulsory for the individual right holder, and retrospective in application. In Australia, for constitutional and legislative reasons, the UK scheme was simply not possible.Under the Australian artist resale act, it is the individual right of choice, the right to say 'no', that is inalienable. Rights are a matter of freedom; a right to which you cannot say 'no' is a duty (tax) - not a right. Further, because copyright is purely an individual opt-in right, the Australian scheme (which offers an opt-out provision) was considered too tax-like to be part of the Commonwealth’s Copyright Act; hence is a sui generis act. It therefore offers no precedent for modification of the copyright act.In the UK, it is the collection fees paid to the compulsory management collectives that is an inalienable right. DACS' Australian sister organisations went so far as to openly advocate to a parliamentary committee, that artists who wanted nothing to do with their compulsory scheme, should be forced to pay a fee to them for non-service.The Australian legislation offers artists three options: artists may choose not to collect the royalty at all; they may use the Government-appointed sole service provider - Copyright Agency Limited (CAL), or artist may make their own individual collection arrangements. The legislation allows artists free individual right of choice, according to their individual circumstances.I remain surprised that the UK's Conservative-Liberal Democrat government is supportive of compulsory collectivization. And also supportive of the restriction of the trading rights of individual artists in order to benefit a tiny minority of successful artists and artists' estates. What is the wider community benefit that justifies the use of government-mandated power to impose this scheme upon artists and art buyers? It is hardly a matter of national urgency, and it involves significant transaction and opportunity costs to artists.Finally Ms Spriggens, regarding your reference to "my gallery" and costs. In Australia, there is a free market for the provision of commercial professional services. The collection of copyright fees is a professional service and not an opportunity to impose an ideological preference for a business model that favours collectives. Many artists are sole traders, for whom the economic interests of compulsory collectives are antithetical to their own economic interests. I freely choose to employ my representative gallery's services and like any other Australian, I am free to dispense with their services at any time.

We had already raised the issue with Parliamentary Standing Committee (Feb 2009) of the UK having more than one agency - specifically two agencies (DACS and ACS), and the fact that the second agency was created because of artists' dissatisfaction with DACS management style and its monopoly collection fees of approximately 25% of the royalties collected.

When questioned by the committee, about competing agencies and monopoly sole-agencies in the UK, the former head of DACS and then current CEO of Viscopy, Joanna Cave, stated clearly: "we would have preferred it [monopoly]".

I was dealing in the art market until mid 2010 in a part-time capacity, but have ceased trading in Ausralian art and moved my attentions to those artists of foreign bent, or those worthy Australian artists who have not been with us for more than 70 years.

I have only three simple questions for the supporters of RRR or their Agency:

1. How does an artist who is dead benefit from RRR?

2. Why does the estate or family of a successful artist need the bebnefits of RRR?

3. If an indigenous work is sold for $10,000, the benefit is $450.00, with $50.00 for CAL- how will CAL find this artist, whose address may (very) typically be "Bob Smith, c/o Halls Creek PO".for the princely sum of $50.00?

I apologise for the anonymity. The unease in the marketplace is palpable, with some well known art houses refusing even to report major auction sales to CAL.

About delivery- finding people in a non opt-in system is intrinsically difficult and expensive. The collection threshold is at $1000 well below the 'economic to deliver' threshold. Hence the need for CAL's significant resources ( plus direct underwriting by public money).

This brings up another 'problem'.

Ms Cave stated to the Federal parliamentary committee that "DACS collects 95%" of all the resale royaltys in the UK. DACs is the default collection service in the UK, as such it collects a lot of money for right holders who are not members of DACs. Many of these unknown right holders will never be found ,their money will be eventually redistributed . The extension of the scheme to the 4 times larger market for dead artists will greatly expand the pool of money that DACS cannot 'deliver' , money that will eventually be redistributed.

This eventual diversion of payment of rights owed to unknown artists, into rent paid to artists known to DACS is of obvious commercial interest to DACS. Where is the wider community benefit that would justify it?

In Australia if the right-holder cannot, after the statutory period, be found ,the money will be returned to the person who paid it , and only if that proves to be impossible it would be used to underwrite the costs of operations.

The drafting of the act took into account the 'moral hazard risk' intrinsic to the collection industry : If the management of the collection service provider completely fails to deliver( to the right holder), then the collection service could keep all of the money . Rewarding failure, to deliver, would be poor design.

The drafting/implementation process also took into account the licensing industries common conflating of individual economic rights with hypothecated taxes paid to groups.

Under the Commonwealths service provision contract if the management was to seriously fail to deliver, the minister has the discretionary power to replace the management.

BTW- CAL is a professional organisation ,it is just doing its appointed job.... As well as it can be done.

Regarding The Indigenous art, One leading indigenous ( I mean he is indigenous) art trade figure vocally complained to the committee about " widespread lack of consultation". Most of the people out in the center had no idea about this "important new benefit" until it hit them.

Resales of $5 thousand or more are not usually of truly unknown artists and CAL is making real efforts (it is expensive) . However there are intrinsic problems: One is , years of government policy has accidentally created a situation were few indigenous artists have a close relationship with a Representative Gallery and this makes contacting these artists harder than it is for most other australian artists .Another more intractable problem is likely to be the very complex systems of 'skin' relationship obligations that determine who is entitled to a share .

I am on record as stating that whilst I am no fan of the idea at the primary level , I "can live with the Governments scheme", At the level of implementation it was done carefully by legitimate elected authority.

Ms Cave asserted to the parliamentary committee that 'reciprocity' with the EU's varying schemes required that the Australian Act had to match Ms Caves interpretation of the EU directive.

The committee member Mr Mark Dreyfus is, outside of parliamentary life, a respected silk.These are his views on 'harmonization'

Mr DREYFUS—I can say on the public record that I think it most unlikely that the EuropeanCommission would investigate the constitutionality of an Australian law; they would take it atface value. That is position in a whole range of other reciprocal areas of legislation. Withreciprocal pension schemes and free trade treaties, they take Australian law at face value and itstands until it is held to be invalid for any reason.

DACS claim that the UK must harmonize with the wishes of DACs is of obvious benefit to DACS.

The contract requires CAL to make very detailed quarterly reports to the minister and to advertise all affected resales on its public website.This is principally so as to allow artists the right of instructing CAL to not collect their royalty on that resale. Reliable and accurate public advertising of affected resales is the Number One KPI in the contract.

CAL is required to lodge public annual Fin statements with ASIC .

The UKs system was introduced at the peak of the biggest economic bubble of all time , people were prepared to gamble on anything, times have changed .

The effects on 'buyer behavior' in Australia been more obvious (and worse) than I had expected. The general downturn has multiplied the loss of confidence caused by the introduction of the royalty.One auction house that I know no longer accepts artworks by younger non blue-chip artists; "its just not worth it"

Still, at least our GST is only 10%. In the UK the royalty has to be paid on top of a VAT that will soon be 20%!

The UK seems to actually want to move the industry, lock stock and barrel, to New York.

A addendum.The act makes provision for parliamentary review at the end of five years. The act , particularly the non retrospective clause 11 and the non compulsory clause(s) 22-23, reflects Australian constitutional and legislative constraints, the Act was bipartisan , passage was "non-controversial'.

The Idea has gone as far as it can go. Time will tell as to whether it is worth continuing public backing.

sorry- a further Addendum I am not sure if CAL is required to lodge with ASIC . It is none the less required to provide public annual reports and fin statements. Being a authority of the Commonwealth, CAL is subject to proper supervision and is a professionally run organisation.

Anonymous Part Time Art Dealer Says:Thank you John, informative as always.

I have just perused the 09-10 CAL Annual Report, and there is some interesting stuff:

There are 28 staff members, none of whom earn less than $100k, and 6 who earn more than $150k, and 3 who earn more than $200k. This does not include bonus payments! Or overseas trips for 8 staff members. Are there any Indians in this organisation? Where do I sign up?

A quick look at the figures does not detail success or otherwise of the collection or distribution of RRS funds - the figures are 'broad brush' in the extreme. Sorry about the bad pun. I wonder if an email enquiry would yield any results...

CHAIR—Miss Cave, would it not be that the construction of the legislation is providing abalance that, from my understanding in the UK, is expressed through a competitive collectionmodel rather than a mandated single model, so that artists exercise their choice by deciding inwhat manner the collection will take place?

Miss Cave—In theory that is correct, but in practice what has happened in the UK is that thereis only one collecting society which operates on a true collecting society model of not-for-profitand that is DACS. There are two competitor agencies that have entered the marketplace. Theyare both art trade sponsored bodies. They collect for a very small handful of artists and DACS isresponsible for collecting about 95 per cent of the royalties.In theory you are right. The artist can choose an agency, but they have no choice over any ofthe other provisions. They have to receive the royalty through an agency. They cannot negotiatethe rate or any of the other things which affect the rules.

CHAIR—I take it the collective position of the alliance is for one mandated collectiveagency?

Miss Cave—Yes. I think the government’s commitment to a tender process with scrutiny andrequirements of reporting and transparency should provide the reassurance and checks andbalances that you would be looking for to justify a single service provider. Indeed, we wouldhave preferred that [monopoly] in the UK.

CHAIR—You would be aware of the contrary argument as expressed in Mr Walker’ssubmission?Miss Cave—Yes. As I said in my statement, he is entitled to his opinion, but it is not typical.

Anonymous, CAL is principally a facilitator of the easy availability of books for public education. The ARR is a small add on. So far there have been about 100 listings For further details you could ask them , or ask the Government.

These sort of collection organisations are intrinsically expensive to run, even when they are run professionally. CAL's operating costs of about 10% -15% compares favorably to many other similar organisations. For example Viscopy over the years had costs reaching as much as 30-40+% of the money it collected.

These sort of collectives are a last resort. The justification for CALs Authority Status is solely the benefits to the public through education, any benefits to publishers and authors is a secondary acidental effect.

Shane Simpson is a very respected australia copyright expert. The following quote is from his Review of Australian Collecting Societies, 1995, for the Commonwealth Government. In Section 2.5 on the role of statutory licences and collective administration in a system of exclusive rights, Simpson stated:

"The international system of copyright, as reflected in the Berne and Universal Conventions, is based upon the granting of exclusive rights of control to copyright owners. It is generally a system in which the owner of each right has the right to control that right, territory by territory, term by term and use by use. It is ruggedly individualistic: The rights of copyright grant individual owners the right to determinewhether these rights are to be exploited and, if so, the terms of exploitation. Collectiveadministration is, and should be, an exception rather than the rule."

He continued:

"The general attitude of WIPO to statutory [compulsory management] licences is that they should be avoided wherever [voluntary] collective administration is feasible. In brief, it is considered that collective administration recognises that the individual copyright owner has theessential right to control usage - even though, for ease of administration, that individualmay choose to license or assign that right to a representative organisation. When that right to control is taken away, all that one is left with is a "right to remuneration", which is a quite different concept to the full rights of copyright.

In reference to the argument that individual primary rights are obsolete in this modern digital age and should be replaced by statutory rights, Shane Simpson further stated:“It is very doubtful that this response is in the interest of the general community, although it is certainly in the commercial interest of certain commercial would-be, rights-user groups.”

The benefit to 'certain commercial would-be, rights-user groups' is obvious. But what is the wide community benefit?

CHAIR—Miss Cave, would it not be that the construction of the legislation is providing a balance that, from my understanding in the UK, is expressed through a competitive collection model rather than a mandated single model, so that artists exercise their choice by deciding in what manner the collection will take place?

Miss Cave—In theory that is correct, but in practice what has happened in the UK is that thereis only one collecting society which operates on a true collecting society model of not-for-profitand that is DACS. There are two competitor agencies that have entered the marketplace. Theyare both art trade sponsored bodies. They collect for a very small handful of artists and DACS is responsible for collecting about 95 per cent of the royalties.In theory you are right. The artist can choose an agency, but they have no choice over any of the other provisions. They have to receive the royalty through an agency. They cannot negotiate the rate or any of the other things which affect the rules.

CHAIR—I take it the collective position of the alliance is for one mandated collective agency?

Miss Cave—Yes. I think the government’s commitment to a tender process with scrutiny andrequirements of reporting and transparency should provide the reassurance and checks andbalances that you would be looking for to justify a single service provider. Indeed, we would have preferred that [monopoly] in the UK.

CHAIR—You would be aware of the contrary argument as expressed in Mr Walker’s submission?Miss Cave—Yes. As I said in my statement, he is entitled to his opinion, but it is not typical.

the full transcript is at http://www.aph.gov.au/hansard/reps/commttee/R11596.pdf

PS The Constitutional obstacles to both retrospective application and to hypothecated taxes paid to collective managements costs, are very real. Viscopy simply chose to spend years ignoring all advice that it did not like; "a sense of superiority based solely in a lack of curiosity".

CHAIR—Miss Cave, would it not be that the construction of the legislation is providing a balance that, from my understanding in the UK, is expressed through a competitive collection model rather than a mandated single model, so that artists exercise their choice by deciding in what manner the collection will take place?

Miss Cave—In theory that is correct, but in practice what has happened in the UK is that thereis only one collecting society which operates on a true collecting society model of not-for-profitand that is DACS. There are two competitor agencies that have entered the marketplace. Theyare both art trade sponsored bodies. They collect for a very small handful of artists and DACS is responsible for collecting about 95 per cent of the royalties.In theory you are right. The artist can choose an agency, but they have no choice over any of the other provisions. They have to receive the royalty through an agency. They cannot negotiate the rate or any of the other things which affect the rules.

New comment, Pt 2: CHAIR—I take it the collective position of the alliance is for one mandated collective agency?

Miss Cave—Yes. I think the government’s commitment to a tender process with scrutiny andrequirements of reporting and transparency should provide the reassurance and checks andbalances that you would be looking for to justify a single service provider. Indeed, we would have preferred that [monopoly] in the UK.

CHAIR—You would be aware of the contrary argument as expressed in Mr Walker’s submission?Miss Cave—Yes. As I said in my statement, he is entitled to his opinion, but it is not typical.

the full transcript is at http://www.aph.gov.au/hansard/reps/commttee/R11596.pdf

PS The Constitutional obstacles to both retrospective application and to hypothecated taxes paid to collective managements costs, are very real. Viscopy simply chose to spend years ignoring all advice that it did not like; "a sense of superiority based solely in a lack of curiosity".

Ms Caves understanding of the meaning of "individual economic right of control" was somewhat at odds with Mr Simpson's understanding of the meaning of " a individual economic right of control".

The UK's law contains a self referential paradox ; On one hand it is a compulsory right; an alienation of the individuals right of control . And Yet on the other hand the law states that it is an inalienable right.

www.smh.com.au/entertainment/art-and-design/art-alliance-to-fight-complex-resale-royalty-20110130-1a9q0.htmlThere is a good deal of unhappiness in the indigenous sector. CAL's collections for the indigenous art sector were $64000. This corresponds to about 1.2 million in sales turnover in 6 months , prior to the resale scheme the turnover of the art centers was 15 million. The sector will provably need further funding for it to cope with the effects of this 'important new benefit'.

"of the eleven EU Member States that currently have droit de suite legislation, seven do not enforce it, or at the very least, do not enforce it on a regular basis. Strangely, against a backdrop of suchfindings, Rachel Duffield, Vice-President of European Visual Artists, said at an international conference, ‘the resale right is administered very successfully in many countries within the European Union’.

Despite Rachel Duffield’s seemingly ill-fitting comment, it would be fair to say that the droit de suite schemes in the various jurisdictions have not been perceived as having been successful. There is no reason to believe that a similar style scheme would have better success in an Australian context.

Hugo The UK's current scheme is clearly a hypothecated transaction tax, paid to collection groups.

The EC is currently attempting to achieve harmonization of transaction tax rates (VAT type taxes) across the whole of the EC. The DACS model for implementation of the resale directive is at odds with EC policy regarding standardised transaction tax rates

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